Basic salary and pension in 2021 have not been adjusted yet

Afternoon of November 12,National Assemblypassed a Resolution on the State budget estimate for 2021. In particular, the National Assembly approved not to adjust the basic salary and poverty line next year. This will also be implemented in 2020, in order to focus resources on preventing and fighting the Covid-19 pandemic, overcoming the consequences of natural disasters, and implementing social security policies.

Explaining the delegates' opinions on this content, Chairman of the Finance and Budget Committee Nguyen Duc Hai said the reason for not adjusting the basic salary and pension is because "the resources for implementation have not been balanced".

According to the Government's report to the National Assembly, the 2020 budget revenue was about 190,000 billion VND short of the estimate, and the 2021 budget revenue estimate decreased by over 170,000 billion VND compared to the 2020 estimate.

Illustration photo. Source Internet

Next year, Congress will assignGovernmentimplement tight fiscal policy, coordinate synchronously with monetary policy to stabilize the macro economy. At the same time, the National Assembly requested the Government to continue to focus on directing the work of revenue management, preventing tax losses, fighting transfer pricing, and continuing to use revenue from lottery activities to prioritize investment and development goals.

Regarding specific targets, the total estimated budget revenue next year is over 1.34 quadrillion VND, and the total expenditure is over 1.68 quadrillion VND. Accordingly, the budget deficit next year is about 343,670 billion VND, equivalent to 4% of GDP. The total borrowing of the state budget is 608,569 billion VND.

Regarding the concerns of delegates about the large budget borrowing and direct debt repayment obligations reaching the ceiling, the Chairman of the Finance and Budget Committee agreed that this situation has many potential risks, which could cause insecurity and loss of national financial security. However, Mr. Hai also informed that the public debt has not yet exceeded the ceiling allowed by the National Assembly.

The reason for the possibility of exceeding the threshold can be attributed to the forecasted difficult revenue situation in 2020 and 2021, and the obligation to repay principal and interest has increased in some years, mainly due to the obligation to repay principal of bonds issued in the previous period coming due for repayment.

The Finance and Budget Committee proposed that the Government continue to restructure debt through diversifying issuance terms, focusing on issuing long-term terms and implementing bond swaps in the debt portfolio to contribute to extending the obligation to repay principal.